Parlay Demographics, Reports, Trends, Consumer Platforms to Win Over Clients

People who choose to go into real estate tend to be sociable types who far prefer mingling with potential clients and exploring new neighborhoods to crunching numbers in front of a computer. But in today’s high tech, data-driven world, there’s no denying that Realtors® are inundated with information about ... well, everything. Your email inbox is likely to be jammed with reports on local development and business news, updates on listings and big-picture stats on the global economy and the domestic job market. 

“There’s no question there’s an overwhelming amount of information out there,” says David Howell, executive vice president and chief information officer of McEnearney Associates in McLean. “A lot of it can be safely ignored, but there are a few pieces of data that Realtors® need to know about to understand the market and help their clients.”
Most Realtors® already recognize that the most relevant data for their clients relates to the local market. 

“Typically clients ask, ‘How much can I sell my house for?’, says Marc Pina, executive vice president and managing broker with Century 21 Redwood Realty in Arlington. “When posed that question, it’s good to share with them what the overall market in the D.C. area looks like and then dive into their Zip Code or subdivision for a real-time look. That data will show how the market is flowing and how aggressive they can be with their pricing.”

While many prospective buyers and sellers follow national real estate news and ask about it, Bic DeCaro, a Realtor® at Westgate Realty in Falls Church, says it’s too easy to get lost in that data.

“I prefer to ignore most of the national economic news to focus on what’s actually happening in our local market,” says DeCaro. “The twice-a-year economic summits held by NVAR are really helpful to get a big picture of our local and regional economy.”
Howell says that even though sales stats from the National Association of Realtors® are accurate, he says those numbers don’t have a lot of meaning to the local market. 

“Average or median national price information can identify national trends, but it’s best not to draw any conclusions from that information about local price trends,” says Howell. “About the only valuable national information to pay attention to is interest rates since that has a big impact on affordability.”

MARKET DATA SOURCES
The consensus among most Realtors® is that local market data is the most valuable resource for their business, although they rely on a variety of sources for that data.
• MRIS. “The tried-and-true best source for market information is MRIS,” says Rob Wittman, area manager in Northern Virginia and principal broker for Redfin brokerage in Falls Church. “Within MRIS you can export custom data to do an analysis for specific properties and for the real estate market in general.” 
Jim Agnew, managing broker of the Dulles Regional Office of Avery Hess, Realtors® in Centreville, recommends looking at MRIS to stay abreast of new construction that can be helpful for buyers or add to competition for sellers.

• NVAR. Each month, NVAR posts a press release and infographic on nvar.com covering the jurisdictions within the association’s footprint. Included are Fairfax and Arlington counties, the cities of Alexandria, Fairfax and Falls Church and the towns of Vienna, Herndon and Clifton. A historical spreadsheet featuring monthly market data from the year 2000 to the present is also accessible on the website. The monthly press release has quotes from members with their observations.
 
• RPR®. NAR’s Realtor Property Resource (RPR®) gets mixed reviews from experienced Realtors®. Some find the data valuable, others say some of the information is incomplete. Some say the site provides an overload of data.

“I think the best RPR® reports are their concise, three-page personalized reports that you can give to buyers about a neighborhood or Zip Code that includes the demographics of the area and average sales prices,” says Agnew.
 
Pina says he turns to RPR® when he has a challenging property to price. “Not only does it help you really understand the market around that home and for the property itself, it makes you look like a genius in front of your client since there’s such an abundance of data,” says Pina. “I'd venture to say that most agents don't know about it or don't use it, so if you do, you're well ahead of the competition.”

Howell says RPR provides extensive information for properties such as flood zone maps, tax histories and mortgage information, but he says the lack of participation of some brokerages means that in some areas, including Northern Virginia and Metro DC, the pricing information for a Comparative Market Analysis is less than accurate. 

• RBI Smart Charts. Agnew says that the enhanced Smarter Agent professional reports provide information that agents can analyze to provide quick information to buyers.  “The great thing about the charts is that you can drill down to a Zip Code or a neighborhood or look at a whole county and the data goes back five years,” says Scott MacDonald, president of Re/Max Gateway in Chantilly. “They even have videos you can embed in your own website.”

CRUCIAL DATA POINT: OPINION VARIES
Wittman says the most meaningful local data is the absorption rate because it helps Realtors® know whether their clients have leverage to negotiate.
“The most relevant data is the local contract activity, particularly year-over-year rather than monthly,” says Howell. “You need to go as local as possible with this, because the D.C. market is different than Arlington and that’s different from Fairfax. MRIS can take you down to the neighborhood level with their data.”
Howell also recommends looking at the list-to-sales price ratio to get a good idea of demand trends. 

“I typically stick to top level data such as Sold Dollar Volume, Average Sold Price, Units Sold, Average Days on Market and Average Sold Price to Original List Price for the prior month,” says Pina. “I pull these from RBI Stats for the county, subdivision or ZIP Code.”

Howell suggests that price change trends are an important market indicator.
“If 90 percent of the homes that went under contract didn’t have a price reduction since they were originally listed, that indicates a strong market,” says Howell. “When you see a higher percentage of homes that have one or more price reductions before they sell, then that’s an indication that the market is slowing.”

LISTING DATA
When looking for properties for her buyers and for comps for her sellers, DeCaro starts with MRIS and also looks at Zillow to cross-check for FSBO properties that aren’t in MRIS.
“We partner with the MRIS Home Pricing Wizard system to look at trends in neighborhoods such as Days on Market and average list price to sale price,” says MacDonald. “That information is helpful to buyers and to sellers. But we also compare it to Zillow’s Zestimate prices because we know that consumers look at Zestimates. It’s important to be able to talk to consumers about what they see and to be able to explain where our data comes from.”

Agents must help consumers understand the limitations of Zillow’s valuation tool. In a June 10, 2014 Washington Post article addressing the accuracy of Zestimates, Howell noted that research “shows that, on average, those ‘Zestimates’ are within 5 percent of the actual value of a home just half of the time.”
Listing data is equally important to sellers who want their agents to have the most up-to-date information. 

“Sellers want to know the value of their property and how quickly it will sell,” says Agnew. “MRIS and RBI provide plenty of data that you can use to do a strong CMA and to give them a sense of how long properties like theirs are staying on the market.”

REAL ESTATE TRENDS SOURCES
Realtors® can be inundated with material about national, regional and local economic and housing trends as well as information meant to improve their business practices. A few sources that local agents use include: 

• George Mason University Center for Regional Analysis. “George Mason’s center produces great information on jobs, wages and the local economy that Realtors® can use to understand trends in the housing market,” says Howell. “For instance, it used to be that Northern Virginia consistently generated the most new jobs, but right now there are more new jobs in the District. It’s important for Realtors® to stay on top of those trends.”
• Keeping Current Matters. Howell says this site provides excellent information on general trends such as propensity to buy or rent, but he says its information on pricing is less valuable on a national or even regional basis compared to local information. 
• Inman News. “The articles on Inman News, which are free to MRIS members, are really helpful for learning about trends, particularly about technology,” says DeCaro.
• Housing Wire. MacDonald skims articles on this site to gain insight into what’s happening on the lender side of the business.
• DS News. MacDonald says Realtors® can gain valuable insight about real estate trends from the DS News articles, although he says scanning a few headlines and being selective about which ones to read can save time.

Networking with other agents can be the best way to make sense of available data. DeCaro says discussions in Facebook Forums among local Realtors®, lenders and settlement companies help her stay up-to-date on what people are experiencing in the market even before data is available.

“Howell says that hard data from MRIS can be supplemented with anecdotal evidence about the market from other agents."

“Back in 2014 I was extremely busy with buyers and sellers, but I kept hearing from other agents that the market was slowing down for them in May and June,” says DeCaro. “I was able to talk to my clients about the possibility of the market slowing, so they could take that into consideration when they were planning to make an offer or list a home for sale. The word on the street from other agents can help you confirm or counter speculation on what’s happening.” 

Howell says that hard data from MRIS can be supplemented with anecdotal evidence about the market from other agents. “You can look at the data that shows the number of homes selling at their original price or above the asking price to get an idea of whether there are multiple offers for a property, but you can also hear about trends like that from other active agents,” he says.

MacDonald holds monthly real estate exchange meetings in each of his five offices that are open to all agents, not just Re/Max Gateway agents. He brings in lenders and title company representatives to share information about what they’re seeing in the market. His agents talk about their experiences, what their buyers are looking for, and about their listings. 

FUTURE OF BIG DATA AS ANOTHER TOOL
MacDonald says he subscribed for a year to a  predictive analytics service  company that provided data on consumers within a certain zip code such as how long they have lived in their home, their mortgage balance, their age, family size, children’s ages and even salary estimates based on their LinkedIn employment profile. These data points are aggregated to predict the top 20 percent of people who are most likely to sell in the near future.

“I think data analytics like this can help agents market to buyers and sellers someday, but I just don’t think we’re quite there yet,” says MacDonald. “It might be more valuable and accurate if the predictive analytics providers could partner with someone who has data on home searches to see if the homeowners are looking online at homes. I definitely think big data will eventually be a huge help to agents to do targeted marketing instead of the scattershot approach we take now.”

For now, Wittman suggests that agents streamline the available data to put it in context for their clients. He says agents shouldn’t be shy about using the abundance of resources that are also available to consumers and to supplement those resources by sharing their local knowledge, insights and experience. 

SAMPLE DATA SOURCES

go.nvar.com/marketstats
for NVAR footprint monthly and historical data
http://cra.gmu.edu
for regional hosing economic trends
http://keepingcurrentmatters.com/
for national housing trends
https://www.narrpr.com/
provides comprehensive propert reports including school districts, flood zone maps, mortgage data, demographics and more
http://www.inman.com/
free access for MRIS members to articles about real estate news and business practices
http://www.housingwire.com/
national news stories, particularly about mortgage financing
http://www.dsnews.com/
national news stories about real estate trends and financing
http://www.getsmartcharts.com/
local data charts provided by RBI, a subsidiary of MRIS
http://www.mris.com/mris-products/premium-products/home-pricing-wizard
home value trends and CMA assistance powered by MRIS
http://www.facebook.com/
private forums led by local Realtors®, lenders and title companies can be joined bu request
http://www.greatschools.org/
provides rating and data about schools
http://www.zillow.com/
some Realtors® check this site for FSBO listings and to compare Zestimates with their CMA
http://www.smartzip.com/
comprehensive data on homeowners available by subscription